Checks are commonly used in financial transactions as a substitute for hard currency. Exchanging goods or services for a check involves a risk that the check is forged or otherwise being fraudulently passed off as a legitimate negotiable instrument. In an effort to combat fraud, checks will often bear numbers written in magnetic ink that identify the bank and account from which the check is drawn. This information has traditionally been extracted using a Magnetic Ink Character Recognition (MICR) reader and used to validate the account electronically prior to accepting the written check. Accepted checks are then retained at the point of sale and later processed as a paper document through the banking system. Processing paper checks through the banking system can constitute a significant expense and can also result in a delay between the receipt of a check and the transfer of funds from the account on which the check is drawn.
Newer transaction systems use a process referred to as “check truncation”, which can involve reading the MICR information on a check and capturing an image of the check. The MICR information is used to validate and accept the check and then the check is returned to the customer. The image of the check is retained by the vendor and is only provided to the bank to settle disputes between the bank and the customer concerning the validity of the check. The “check truncation” process is entirely electronic and does not involve the expense associated with handling paper checks.
Current check reading devices enable magnetic ink characters to be read twice to increase the confidence that the MICR has been read accurately. Typically, such devices will read the MICR on a check twice in the same direction or in a forward and reverse direction.